Foreclosing on Ohio - Big Bank Foreclosures in Cincinnati, Cleveland, And Columbus

8/6/2019 Foreclosing on Ohio - Big Bank Foreclosures in Cincinnati, Cleveland, And Columbus

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Table of Contents

Main Findings Page 3

An Overview of Foreclosures in Ohio Page 5

Demographics of the Study Area Page 7

Big Banks and the Foreclosure Crisis Page 8

Cost Es mates of Foreclosures Page 11

Cincinna , Cleveland, Columbus Foreclosure Totals Page 12

Foreclosures by Neighborhood Race Pages 16

Foreclosures and Neighborhood Vacancy Page 18

Conclusions and Policy Recommenda ons Page 19

Report Appendices Page 20

A report of

NATIONAL PEOPLES ACTION810 North Milwaukee Avenue Chicago, IL 60642 312.243.3035 www.npa-us.org

Author: Nicholas BianchiMay 2011


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National Peoples Action | May 2011

Foreclosing on Ohio: Big Bank Foreclosures in Cincinnati, Cleveland, and Columbus

Main Research Findings

The home foreclosure crisis continues to negatively impact Ohio as the Buckeye state has suffered a fourthconsecutive year of historically high rates of mortgage default and foreclosure. This analysis of home

foreclosure data in Ohios three largest cities, Cincinnati, Cleveland, and Columbus, inds that:

1. Nearly one out of every ten (9.6%) housing units in residential properties throughout Cincinnati,Cleveland, and Columbus are estimated to have received a foreclosure notice since the onset of thenations inancial crisis in 2007.

2. A minimum of one out of every 17 homes (5.9% of all residential housing units) in the study areareport a foreclosure - a rate equal to more than one home falling into foreclosure for every city block on average across the three city study area since the beginning of 2009.

3. Since 2009 foreclosures have resulted in an estimated total loss of $1.6 Billion in home propertyvalues for homeowners in Cincinnati, Cleveland, and Columbuss neighborhoods.

4. The near-term costs of foreclosures in Cincinnati, Cleveland, and Columbus to local government from2009 through 2012 include an estimated $5.5 Million in direct expenses to deal with foreclosure-related vacancies and $30 Million dollars in lost property tax revenue due to foreclosure-relatedproperty abandonment.

5. There were over 20,000 homes lost to foreclosure which became bank-owned property in the 27months study period. This igure represents 2.8% or one out of every thirty six homes in the entirestudy area became bank-owned property (REO) in the last 27 months - a rate equal to approximatelyone bank owned property for every two city blocks across Ohios three largest cities. Since 2009 thetop six banks have had a foreclosure (either start or completion) on one in 34 housing units (2.9%) inresidential properties across the study area.

6. The countrys largest banks, including JPMorgan Chase, Bank of America, Wells Fargo, Citibank, and USBank are the inancial institutions with the majority of foreclosure ilings in the three city study area.Together the big banks iled 57% of all home foreclosures on over 18,900 properties in Cleveland,Columbus, and Cincinnati since 2009.

7. Over one third (39%) of all homes lost to foreclosure in the study area became the property of one of the nations big banks. A minimum of 9,200 Cleveland, Columbus and Cincinnati homes have beenrepossessed by big banks in foreclosure auctions in the last 27 months.

8. The impact of the foreclosure crisis has had a widespread but uneven impact on Ohios urbancommunities. Hit the hardest are Ohios communities of color. Analysis of home foreclosure data inthe cities of Cleveland, Cincinnati, and Columbus, OH shows that home foreclosure ilings are onaverage almost three times as concentrated in communities of color than in majority white areas. In


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Communities of Color home foreclosure ilings in the last two years occurred at more than double therate of other communites : 5.4% of occupied housing units.

9. Since the beginning of 2009, homes have been lost to foreclosure becoming bank-owned (REO) propertyin majority African-American areas at three and half times the rate of neighborhoods with a relativelylow African-American population. In these majority African-American communities there were on average 80

to 100 bank-owned properties per square mile.10. The foreclosure crisis has contributed to the problems of housing vacancy in Ohios urban areas. Within the

three city study area, bank-owned foreclosed properties were three times more prevalent in neighborhoodswith relatively high vacancy rates (22.3% or more all housing units vacant). Approximately 5% of all housingunits in high vacancy neighborhoods became bank-owned since 2009, creating an estimated 10% to 30%increase in already high home vacancy rates in impacted areas of Cincinnati, Cleveland, and Columbus.

2.


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An Overview of Foreclosures in Ohio

Ohio is one of states hardest hit by the foreclosure crisis. While the Buckeye State has not posted the shear volumes of fore-

closures as the once-hot housing markets of California, Nevada, and Florida, the cumulative impact of foreclosures have

weighed heavily on Ohios housing market and its economy. Ohio is currently ranked as the 9th highest state in terms of total

foreclosure activity and third highest in the Midwest, behind economically struggling Michigan and Illinois. However, cur-

rent foreclosure activity rates fail to capture the cumulative impacts of sustained foreclosure activity in the state. The fact isthat that the foreclosure crisis started early in Ohio and the state now has endured elevated levels of home foreclosure for

over half a decade. 1 In 2006, Ohio experienced a sizable 23.6% increase in annual home foreclosure ilings and the number

of ilings have continued at a historically-high rate of over 80,000 ilings per year. 2

Sustained, high rates of home foreclosure have negatively impacted Ohios housing market and home values and have con-

tributed to high rates of unemployment and housing vacancy. 3 In 2010, almost one quarter (22.5%)of all home sales in Ohio

occurred on foreclosed properties . With an average residential foreclosure sales price under $80,000, or 52% of the price of

non-foreclosure home sales, Ohios foreclosed properties have the lowest relative prices in the country. 4 Foreclosure sales

prices in the three city study area are even lower, with foreclosures in Cleveland selling for an average of $35,000 and for$70,0000 in Cincinnati and Columbus.

Not only are the resale prices of foreclosed homes in Ohio very low, the rate of foreclosed home sales is not suf icient to re-

duce the overall foreclosure inventory level with one foreclosed homes sold for every three new foreclosure ilings. These

factors suggest that any recovery in the housing market based on current foreclosure and absorption rates will be prolonged

and particularly costly for Ohios homeowners.

1.) Home foreclosures in some urban areas of Ohio, notably Cleveland, spiked upwards even earlier in the last decade and have continued at historically high levels for eight

years from 2003 to 2011.

2.) In late 2010, the major mortgage servicers widespread practice of robo-signing -automated foreclosure actions which lack the proper legal documentation and have

resulted in potentially 1000s of illegal property transfers during foreclosure proceedings, came to light. As word of the scandal becoming public and an ensuing Attorneys

General investigation, many major mortgage servicers, including the banks JPMorgan Chase, Bank of America, and HSBC, as well as Fannie Mae, and Freddie Mac

temporarily halted all foreclosures. A reduction in home foreclosures filings in the forth quarter of 2010 and the first quarter of 2011 has been attributed to this event.

3) Ohios unemployment rate rose 6.5 percentages points between 2000 and 2010, with 80% of the r ise in unemployment occurring since 2006 and the widespread

economic fallout of the mortgage crisis. Ohios housing vacancy rate increased 3.1 percentage points during the last decade and now exceeds 10% of all housing units.

4) RealtyTrac reports that in 2010, 26,594 foreclosed homes sold in Ohio compared with 85,483 new foreclosure filings in the s tate.

Cleveland

Columbus

Cincinnati

Foreclosed Home Sale Prices in Cincinnati, Cleveland, and Columbus

RealtyTrac, 2011


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Foreclosure Filings in Cuyahoga, Franklin, and Hamilton Counties

Ohios three most populous counties, Cuyahoga, Franklin, and Hamilton, all have experienced elevated foreclosure rates since

at least 2006. Given these countywide iling rates of around 30,000 ilings per year and the 45,000 unique residential prop-

erties in the last two years observed in the RealtyTrac data set, this report conservatively estimates that in Cincinnati, Cleve-

land, and Columbus upwards of 80,000 residential properties have been in some stage of foreclosure since 2007.

A four year foreclosure total of 80,000 houses represents at minimum 95,000 total housing units, an amount equal to 9.6% of

all housing units in residential property across the Ohios three largest cities .5

In Cincinnati, Cleveland, and Columbus, OH nearly one in every ten housing units on average have been or are in foreclosure

during the last four years.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2005 2006 2007 2008 2009 2010

Cuyahoga

Franklin

Hamilton

County 2005 2006 2007 2008 2009 2010 Totals

Cuyahoga 10,935 13,610 14,946 13,858 14,171 12,825 55,800

Franklin 6,596 8,875 9,145 9,305 9,499 9,646 37,595Hamilton 5,066 5,876 6,416 6,673 6,714 6,556 26,359

Totals 22,597 28,361 30,507 29,836 30,384 29,027 119,754

Foreclosure Filings in Cuyahoga, Franklin, and Hamilton Counties

2005 to 2010

Ohio Supreme Court , reported by Policy Matters Ohio 2011

5. The three city study areas includes a total 1,159,000 housing units, of which 84% or 971,371 units are in properties of less than 10 housing units. This analysisestimates that the average residential property in foreclosure impacts 1.2 housing units. Therefore the 80,000 foreclosures impact more than 95,000 housings units, whichis compared with the total 971,000 housing units (1-9 units) that represents essentially all properties that are eligible for a consumer residential mortgage.


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About the Study Area: Columbus, Cleveland and Cincinna , OH

This report examines a study area composed of Ohios three largest cities: Columbus, Cleveland and Cincinnati and some

adjacent inner-ring suburbs in Cuyahoga, Hamilton, and Franklin counties. Together the three urban areas contain 1.48

million residents, or 12.8% of the states total population with approximately one in every 8 Ohioans residing in the one of

the three cities. The white population comprises just over half (52.5%) of the study areas population followed by African-

Americans who make up 38.2% of the three cities' combined population. With a total African-American population in the

study area over half a million (564,952), approximately 40% of Ohios African-American population resides in one of the

three cities covered in this analysis. The studys areas Hispanic population is relatively small at 6.2% of total population ,

however the 92,200 Hispanics residing in the study area represent 26%, or one out of every four of the states Hispanic pop-

ulation.

The three cities represent different population and demographic trends with Ohios capital and largest city, Columbus, regis-

tering a 10% growth in population between 2000 and 2010. In contrast Cleveland and Cincinnati both witnessed overall

declines in their city population of 17.1% and 10.4%, respectively. Cleveland has experienced the most pronounced popula-

tion declines, losing a quarter of the citys White population and a 13% of the citys Black population during the last decade.

While relatively small, the Latino population is notable in that it has increased in all three cities, most dramatically in Colum-

bus, OH where the number of Hispanic residents in the state capital more than doubled during the last decade.

All three cities in the study area experience elevated residential vacancy rates with 14.5% of all housing units in the three

city study reported to be vacant -a nearly 50% increase in housing vacancy rates above 2000 levels. The vacancy issue is

most severe in Cleveland where the percentage of unoccupied housing has increased by two thirds (65.2%) since the last

decade. In both Cleveland and Cincinnati, nearly one out of ive housing units were reported vacant. While Columbus, OH

reports a lesser overall vacancy rate, vacant and abandoned housing is a problem in certain neighborhoods (such as North

and South Linden) where vacancy rates exceed 25%.

Geographic areaTotal

population(2010)

Pct Change inTotal Population

2000-2010

Housing Units(2010)

% Change inHousing Units

2000 - 2010

Vacant HousingUnits 2010

% of HousingUnits Vacant

2010

% Change inHousing Vacancy

2000 - 2010

Ohio (State Total) 11,536,504 1.6% 5,127,508 7.2% 524,073 10.2% 44.9%

Columbus 787,033 10.6% 370,965 13.4% 39,363 10.6% 35.4%

Cleveland 396,815 -17.1% 207,536 -3.9% 40,046 19.3% 65.2%

Cincinnati 296,943 -10.4% 161,095 -3.0% 27,675 17.2% 59.2% Three City Totals 1,480,791 -2.7% 739,596 4.3% 107,084 14.5% 49.3%

Source: US Census 2010, 2000

Geographic area2010 Totalpopulation


2000-2010

% Of P opulationWhite (One race

only)

Pct Change inWhite Population

2000-2010

% OfPopulation

Black

Pct Change inBlack Population

2000-2010

% OfPopulation

Hispanic

Pct Change inHispanic Pop 20 00-

2010

Ohio (State Total) 11,536,504 1.6% 82.7% -1.1% 12.2% 8.2% 3.1% 63.4%

Columbus 787,033 10.6% 61.5% 0.07% 28.0% 26.5% 5.6% 153.9%

Cleveland 396,815 -17.1% 37.3% -25.5% 53.3% -13.2% 10.0% 13.8%

Cincinnati 296,943 -10.4% 49.3% -16.56% 44.8% -6.4% 2.8% 96.4%

Three City Totals

1,480,791 -2.7% 52.5% -9.2% 38.2% 0.9% 6.2% 63.4%

Geographic area2010 Totalpopulation


2000-2010

% Of P opulationWhite (One race

only)

Pct Change inWhite Population

2000-2010

% OfPopulation

Black

Pct Change inBlack Population

2000-2010

% OfPopulation

Hispanic

Pct Change inHispanic Pop 2000-

2010

Ohio (State Total) 11,536,504 1.6% 82.7% -1.1% 12.2% 8.2% 3.1% 63.4%

Columbus 787,033 10.6% 61.5% 0.07% 28.0% 26.5% 5.6% 153.9%

Cleveland 396,815 -17.1% 37.3% -25.5% 53.3% -13.2% 10.0% 13.8%

Cincinnati 296,943 -10.4% 49.3% -16.56% 44.8% -6.4% 2.8% 96.4%

Three City Totals

1,480,791 -2.7% 52.5% -9.2% 38.2% 0.9% 6.2% 63.4%

Source: US Census 2010, 2000

Cincinnati, Cleveland, and Columbus 2010 Population and Race Trends (City Only)

Cincinnati, Cleveland, and Columbus 2010 Housing and Vacancy Trends


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Big Banks Foreclose on Ohios Largest Ci es

The inancial institutions initiating and completing the majority of foreclosures in Cincinnati, Cleveland, and Columbus arethe nations largest banks. 6 The nations ive largest banks, Bank of America, US Bank, Wells Fargo, Citibank, and JPMorganChase, together with Deutsche Bank, 7 started over 57% of all the foreclosures ilings in Cincinnati, Cleveland, and Columbussince 2009. Since the mortgage meltdown and the government supported bail-out of the inancial system in late 2008, the

nations largest banks have been responsible for approximately three out of every ive homes that fell into foreclosure in thestudy area.

This reports inds that the countrys major banks either started and/or completed a foreclosure on no fewer than 22,482unique residential properties, or 4% of all housing units in the cities of Cincinnati, Cleveland, and Columbus since 2009. Be-fore further discussing foreclosures in Ohios largest cities in detail it is worthwhile to irst review the major events that havethat produced the very foreclosures that are the subject of this report.

Five Years of Foreclosures, How did we get here?

The top foreclosing banks identi ied in this report all share a similar business history with respect their home mortgage lend-ing during the mortgage bubble, surviving the inancial crisis through exceptional government support, and assuming a larg-er and more dominant inancial position post-crisis.

The Big Bankss Home Mortgage Lending Leading up to the Crisis

Todays top foreclosing banks were all major residential mortgage lenders and servicers prior to the mortgage market col-lapse. In 2006 the top ive national banks and their subsidiaries directly issued over one third (38.48%) of all mortgageloans in 2006 (excluding Deutsche Bank 8). In 2006 alone the top ive foreclosing banks identi ied in this report made $896Billion in mortgage loans nationwide, of which a minimum of 18.1% were estimated to be high-cost loans generally associat-ed with disastrous subprime home lending at the heart of the mortgage meltdown. 9

6) Based on total mortgage origination dollar volume, 2007-10, Mortgage Industry Directory, Source Media, Inc,7) Deutsche Bank, Europes second largest bank, was one of the major drivers of the housing credit bubble in the United States packaging $32 Billion worth of collateral-

ized debt obligations (CDOs), investment products based on mortgage-backed securities from 2004-2008.8) HMDA, 20069) Over 60% of the 2005 to 2007 vintage of high-cost home loans were estimated to have failed. See: Facing the Foreclosure Crisis in Greater Cleveland, Federal

Reserve Bank of Cleveland, June 2010, page 7.

RankForclosing Bank Name (Lender, Mortgage Servicer, orTrustee) Total Filings

ForeclosuresStarted

(Lis Pendens)

Pct of TotalForeclosure

StartsREO

PropertiesPct of REOProperties

Total Assets12/31/2010 ($

Billions)

Rank of LargestBank H olding

Companies

1 BANK OF AMERICA CORPORATION 5,113 3,864 11.6% 1,250 5.3% 2,268 1

2 US BANCORP 6,215 3,839 11.5% 2,376 10.1% 308 10

3 WELLS FARGO & COMPANY 5,405 3,531 10.6% 1,874 8.0% 1,258 4

4 CITIGROUP INC. 4,733 3,335 10.0% 1,398 5.9% 1,914 3

5 JP MORGAN CHASE & COMPANY 3,338 2,474 7.4% 864 3.7% 2,118 2

6 DEUTSCHE BANK 3,456 1,951 5.9% 1,505 6.4% 2,832 NA

TOP FORECLOSING BANK TOTALS (Top Six) 28,260 18,994 57.1% 9,267 39.4% 10.7 Trillion

All Lender TOTALS 56,792 33,265 100% 23,528 100%

Top Foreclosing Institutions, Cincinnati, Cleveland, and ColumbusJan. 2009 - Mar. 2011

RealtyTrac, 2009-2011


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Todays largest banks were active mortgage lenders in Ohio in 2006 and the home loans they originated in the state showedan even greater concentration of risky and costly home lending. A third (32.4%) of the over 46,000 home loans issued by thebig four banks in 2006 loans were high-cost loans that charged Ohio homeowners nearly 10% interest (APR).

While Wells Fargo, Citibank, and JP Morgan Chase initiated large volumes of high-cost home loans through their af iliate lend-ing channels, the extent of big bank involvement with risky subprime lending is not limited to their direct origination of home loans. Prior to the mortgage collapse, most of the nations top subprime lenders were non-bank mortgage lendingcompanies. However, many of the nations major banks did business with these now infamous, failed subprime mortgagelenders, such as Countrywide Financial and New Century Financial, and facilitated and pro ited from the surge in mortgagelending that spawned the crisis. The non-bank mortgage lenders relied on the nations largest banks as well as Wall Street investment irms to supply warehouse lines of credit to fund their high-volume mortgage lending operations. Insider ac-counts reveal that major banks and Wall Street irms knew about the subprime loans they funded and reviewed the underly-ing mortgage portfolios that would eventually bring the nations economy to its knees. 10

The table above illustrates that the top ive subprime lenders nation wide, which issued $386 Billion in subprime loans inthe two years leading up to the mortgage collapse, were all inanced by a major national bank. 11 Notably, Bank of America,which originated few subprime or otherwise high-cost home loans directly, provided credit to four of the top ive major sub-prime lenders in the country. Similarly, Deutsche Bank did not issue mortgage loans directly in the US but instead focused itsbusiness on inancing other mortgage lending companies and played a major role in packaging and selling investmentsbacked by home mortgages.

10) Muolo, Paul and Mathew Padilla. Chain of Blame. John Wiley & Sons, 2008. Page 166.11) Securities and Exchange Commission 10-K filings, reported by the Center for Public Integrity

Subprime Lender SubprimeLoan Volume2005 2007

Major Bank Creditor Acquired By

Countrywide Financial $97.2 Billion Bank of America,JP Morgan Chase, Deutsche Bank,

Citigroup

Bank of America (July 2008)

Ameriquest Mortgage $80.6 Billion Bank of America, JP Morgan Chase,Deutsche Bank, Citigroup

Citigroup (Aug 2007)

New Century Financial $75.9 Billion Bank of America, Deutsche Bank,Citigroup, Morgan Stanley, Bear Sterns

(Failed)

First Franklin Corp. $68 Billion Bank of America, Goldman Sachs Merrill Lynch, (2006)Bank of America (2008)

Long Beach Mortgage $65.2 Billion Washington Mutual (Parent Company), Goldman Sachs

Washington Mutual (1999)JP Morgan Chase (2008)

Source: SEC

US Top Five Subprime Home Mortgage Lenders: 2005-2007

Major Bank LenderNumber of

Mortgages, 2006

High CostHome Loans

Issued

% of Total LoansHigh Cost

Wells Fargo 18,958 5,873 31.0%JP Morgan Chase 16,815 3,867 23.0%CitiGroup 8,583 5,160 60.1%Bank of America 2,064 151 7.3%

Big Four Bank Total 46,420 15,051 32.4%*includes subsidiaries and affiliates Source: HMDA, 2006

Major Banks Home Lending in Ohio, 2006


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The enormous pro its made from securitization of subprime home loans fueled widespread real estate speculation that spilled over into the once conservative and stable prime mortgage markets. Nontraditional mortgage products were intro-duced and lending standards declined dramatically, all in an effort to produce an increasing volume of home loans to fuelWall Streets mortgage securitization pipeline. These actions produced the real estate bubble that burst in 2007 causing awidespread economic recession and increased unemployment which in turn led to more home foreclosures and inancialdistress for many American families.

Surviving and Growing Amid Crisis

The nations major banks that survived the inancial meltdown of 2008 all did so with unprecedented government support.In additional to the direct support from U.S. Treasurys Trouble Asset Relief Program (TARP), the major banks have also ben-e itted from the support of numerous Federal Reserve programs which are ultimately backed up by the American taxpayer.Since the start of the mortgage crisis the Federal Reserve has lent cash to the major banks at near zero interest rates throughthe Discount Window and other short-term borrowing mechanisms, virtually guaranteeing the banks a sizable pro itablemargin in their investment activities. Furthermore, the Federal Reserve issued more than $1 trillion in new debt since 2008,purchasing mortgage back securities which have propped up values for the largest holders of these investments: major banksand Wall Street irms.

As a result of the inancial support they received during the crisis, the major banks that survived the crisis have all seized onthis opportunity to grow their business to unprecedented asset size and market share and currently reap record corporatepro its. The top ive banks identi ied in this report now account for the 54% of all home mortgage lending, up from 36.4% in2006. Similarly, where Bank of America, US Bank, Wells Fargo, Citibank, and JPMorgan Chase accounted for 34% of all resi-dential mortgage servicing in 2006, these big banks have doubled their mortgage servicing portfolio through crisis-fueledacquisitions and now collect on 63.9% of all home mortgages in the country.

The exceptional government support which has allowed the nations major banks to survive, consolidate, and increase theirsize and market share during the crisis has occurred without any formal agreement or quid pro quo arrangement with thebanks in regards to their current lending and mortgage servicing practices. The US Treasurys Home Affordable Modi ication

Program (HAMP) is a voluntary program that pays the countrys major mortgage servicers to offer delinquent homeowners aloan modi ication. While HAMP provides guidelines for loan modi ications, the decision whether or not to offer a loan modi-

ication program is ultimately carried out by the mortgage servicer, the largest of which are the nations leading inancial in-stitutions. The mortgage servicing process has been revealed to be so lawed and prone to fraud that the US Department of Justice and all 50 States Attorneys General launched an investigation, the outcome of which is still pending at the time of thisreport.

Two years into the program, HAMP has widely been criticized as ineffective. Where the federal program has succeed in cre-ating 550,000 permanent loan modi ications at the time of this report, this number is dwarfed by the nearly 6 million homeforeclosures that have occurred since 2009. 12 Bank of America, Wells Fargo, Citibank, and JPMorgan Chase have given a per-manent HAMP modi ication to 280,000 homeowners, or approximately only 9% of their estimated servicing portfolio of 3.16million home loans that are 60 days or more delinquent. In Ohio, there have been a total of 7,200 HAMP permanent modi i-cation in metropolitan areas of Cincinnati, Cleveland, and Columbus, or an amount equal to approximately 5% of the foreclo-sures in these markets.

12) RealtyTrac, Jan 2011


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Es ma ng Public Costs of Foreclosure

Quantifying the economic costs of home foreclosures to communities and to local government is of critical importance tounderstanding the full impact of the problem. This analysis relies on recent research that has estimated the costs of foreclo-sure in comparable geographies and under similar circumstances. This report segregates economic costs into threecategories: loss in property value to neighboring homeowners, direct costs to local government, and loss of property taxbase.

1) Loss of Neighboring Property Values: $1.6 Billion

Previous research estimates have concluded that each foreclosure event impacts properties within a 500 foot radius and onaverage decreases neighboring property values by an estimated 0.74%. 13 Applying this approach to the study area, it is esti-mated that the 45,000 foreclosures reported since 2009 have resulted in a total loss of $1.6 billion in home property valuesfor homeowners in Cincinnati, Cleveland, and Columbuss neighborhoods. Columbus is estimated to have lost some $576Million in declining home values, Cincinnati suffered a $437 million loss in home values, and Cleveland had $628 million inhome equity wiped away by foreclosures reported since 2009.

2) Direct costs to Local Government: $5.5 Million since 2009

A 2008 study of the costs of vacant abandoned properties in eight Ohio cities found that police, ire, maintenance, and demo-lition costs ran on average $294 and $552 per vacant property in Cleveland and Columbus, respectively. While by no meansa complete assessment of all municipal costs, this reports applies an average of $409 in direct annual costs per property. Inorder to estimate the future rate of vacancy for properties currently in foreclosure this report relies on a recent report by theUS Government Accountability Of ice that found 1,376 vacant and abandoned properties in the three city metro areas that had been in foreclosure sometime from 2008 through March 2010. 14 Based on this number and a roughly equal level of foreclosure activity reported in this study from 2009 through March 2011, we estimate that the total of 45,000 properties inforeclosure in the RealtyTrac dataset will produce will produce an additional 2,000 long-term vacant residential properties

across the study area. Based on this igure, we estimate an additional $1.38 Million in direct local government spending peryear to deal with safety, maintenance, and demolition resulting from these foreclosures. Over a four year time frame from2009 through 2012 we estimate $5.5 million in municipal expenditures due to foreclosures for the three primary municipali-ties covered in this report.

3) Loss to Property Tax Base due to Foreclosure Related Vacancy: $30 million 2008-2010

The Rebuild Ohio study also estimates the annual loss of tax revenue due to vacant and abandoned properties at $2,481 pervacant property in Cleveland and $1,541 per vacant property in Columbus, OH. Using the average of these two estimates ,($2,206 in lost property taxes per vacant property per year) and the projected 3,376 long-term vacant properties associatedwith the foreclosure activity presented in this report, we project a loss to the property tax base of over $7.4 Million dollarsper year due to recent foreclosure, or $29.8 Million over a four year period.

The near-term costs of foreclosure in Cincinnati, Cleveland, and Columbus to local government from 2009 through 2012 areprojected at $5.5 million in direct costs to deal with foreclosure-related vacancy and $30 million dollars in lost in prop-erty tax revenue .

13) Immergluck, Dan and Geoff Smith. The External Costs of Foreclosure: the Impact of Single-Family Mortgage Foreclosures on Property Values. Housing Policy De-bate, 17(2006) See Appendix for details of foreclosure cost calculations.14) MORTGAGE FORECLOSURES Additional Mortgage Servicer Actions Could Help Reduce the Frequency and Impact of Abandoned Foreclosures GAO, Nov. 2010


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Results of Analysis

The data set of 63,210 Lis Pendens and REO foreclosure records dating from January 2009 through March 2011 yields a total

of 45,005 unique properties in Cincinnati, Cleveland, and Columbus in some stage of foreclosure. 30,720 individual residen-

tial properties received a foreclosure iling. A completed foreclosure (bank-owned REO) occurred on 20,564 homes within

the study area.

Total Housing Units Impacted by Foreclosure

The three city study area totaled an estimated 5.9% (56,966) of all housing units in structures with 9 units or less hit with

either a foreclosure start or a foreclosures completion. 15 One out of twenty ive, or 4%, of all housing units (in properties

with 1-9 units) representing an estimated 38,834 housing units in the three city study area received a foreclosure iling.

Furthermore, since the start of 2009, 2.8% of all residential housing units became REO property as more than 20,000 houses

were lost to foreclosure and became bank-owned property in 27 months.

Among the three cities, the Cleveland study area ranked the highest in terms of foreclosures as a percentage of residential

housing units. Since the start of 2009 the greater Cleveland study area recorded 19,860 individual properties in foreclosure

representing approximately 8.1% of all housing units eligible for a residential mortgage citywide. Over 13,700 residential

properties in Cleveland received Lis Pendens ilings representing an estimated 5.7% of all mortgage-eligible housing units.

Furthermore, with over 9,000 REO properties recorded, an estimated 3.8% of Clevelands residential housing units or ap-

proximately one out of 26 homes were lost to foreclosure in the 27 months following the bailout of the inancial sector.

In Columbus, 5.4% of all residential housing units have suffered a foreclosure since 2009, with over 10,800 foreclosures

started and 6,599 area homes lost to foreclosure. The Cincinnati study area reported 9,654 homes in some stage of foreclo-

sure, impacting nearly 12,000 residential housing units or 4% of all housing in mortgage eligible residential properties. This

rate is equivalent to one in 25 homes in foreclosure, or approximately one foreclosure per city block since 2009.

15) . This analysis estimates the number of housing units in foreclosed properties according to the reported property type and compares this estimate to the number of total

housing units in structures with 9 or less units in the city and total study area. This study estimates that the average residential property in foreclosure in the study area

averaged 1.25 housing units per property. See Appendix IV for details on housing unit estimates.

Study Area Foreclosure Record

Foreclosure Start 6,155 7,435 2.5%Foreclosure Completion / REO 4,927 6,338 2.1%

Either Foreclosure Start or Completion* 9,654 11,957 4.0%





Lis Pendens 30,720 38,834 4.0%REO 20,564 26,777

2.8%Either Foreclosure Start or Completion* 45,005 56,966 5.9%* Unique properties only - either Lis Pendens or REO** 1-9 Unit Structures Only)

Study Area Totals

Estimated Total HousingUnits Impacted

Pct of Residential Housing UnitsImpacted**

Number of Properties

Cincinnati

Cleveland

Columbus

Housing Units Impacted by ForeclosureJan. 2009 - March 2011


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Major Banks Foreclosures

The nations largest banks foreclosed on no fewer than 22,459 residential properties impacting over 28,000 housing units,

or an estimated 3% of all homes in the three city study area since 2009. The big banks (as either lender, servicer, and/or

trustee) initiated a new foreclosure on nearly 19,000 homes and repossessed 9,267 homes in foreclosure auctions in the

combined Cincinnati, Cleveland, and Columbus areas during the 27 months since the start of 2009. This report conserva-

tively estimates that one in every 34 homes in the study area were foreclosed on by one of the nations largest banks.

Cleveland experienced the most big bank foreclosures in the study area with roughly one in every 25 (3.9%) residentialhousing units across the three cities receiving a foreclosure from one of the major banks. Columbus ranked second in terms

of overall big bank foreclosure activity with 7,822 homes either falling into foreclosure and/or lost to a completed foreclo-

sure, a rate of 2.6% of all residential housing units or one out of 38 homes in Ohios capital.

In terms of foreclosure completions and REO property Cincinnati ranked second with 2,280 homes repossessed by one of

the nations largest banks since the end of 2008. The above chart reports each of the six major banks foreclosure activity by

city.

Housing Units Impacted by Major Bank ForeclosuresJan. 2009 to Mar. 2011

Bank of America, Wells Fargo, Citibank, JP Morgan Chase, US Bank, and Deutsche Bank

Filing TypeNumber of ResidentialProperties

% of TotalForeclosures

Estimated TotalHousing Units

Impacted

Pct of ResidentialHousing Units

Impacted**Foreclosure Start 3,594 58.4% 4,332 1.4%Foreclosure Completion / REO 2,280 46.3% 2,957 1.0%

Either Foreclosure Start or Completion* 5,179 53.6% 6,394 2.1%

Foreclosure Start 7,603 55.2% 10,256 3.1%Foreclosure Completion / REO 2,897 32.1% 3,983 1.2%


Foreclosure Start 6,325 58.6% 7,259 2.1%Foreclosure Completion / REO 2,163 32.8% 2,641 0.8%


Lis Pendens 18,994 59.0% 23,932 2.5%REO 9,267 41.2% 12,047 1.2%


Columbus

Study Area Totals

Cincinnati

Cleveland

Study AreaForeclosure

RecordBank of America Citibank Deutsche Bank JP Morgan Chase US Bank Wells Fargo Area Totals

Lis Pendens 788 651 286 423 805 641 3,594REO 423 450 252 254 497 404 2,280

Lis Pendens 1,549 1,146 939 968 1,576 1,425 7,603REO 322 335 619 177 841 603 2,897Lis Pendens 1,277 1,315 509 874 1,158 1,192 6,325REO 320 371 293 229 491 459 2,163

Lis Pendens 3,614 3,112 1,734 2,265 3,539 3,258 18,994REO 1,065 1,156 1,164 660 1,829 1,466 9,267

* Total for Cincinnati and Clevela nd include some surrounding municipalit ies, Appendix for complete coverage

Cincinnati *

Cleveland *

Columbus

Study Area Totals

Foreclosure Filings in Cincinnati, Cleveland, and Columbus by Big Bank Foreclosing Institution


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Trends in Completed Foreclosures / REO Proper es

In contrast to foreclosure starts in the study area, the number of completed home foreclosures actually increased 4.7% from

2009 to 2010 . The three cities had a total of 9,219 homes lost to foreclosure in 2009 and a total of 9,649 new REO proper-

ties in 2010, an average of 2,246 homes lost to a completed foreclosure. REO quarterly totals for the individual cities varied

considerably during the study timeframe. Cleveland reported its highest REO totals in the irst quarter of 2009, while

Columbus homes lost to foreclosure reached their highest levels towards the end of 2009 and early 2010. Cincinnati posted

its record high REO levels as recently as the forth quarter of 2010. Again, the impacts of the robo-signing scandal are the

likely cause of the sharp drop-off in foreclosure completions during the start of 2011.

Over the 27 month study period starting in 2009, an estimated 2.8% of all occupied housing units in the study areas were

lost to foreclosure and became bank-owned REO. Since the start of 2009 Clevelands 8,150 REOs represent nearly 4% of all

housing units in the city being repossessed by a bank in a foreclosure sale. Given that the completed foreclosures ilings

since 2009 only represent an estimated 50% of total foreclosures to occur since 2007, this report estimates that over 5 % of

all housing units, or one out of every 20 homes in the greater Cincinnati, Cleveland, and Columbus study areas have been lost

to foreclosure and have become REO property.

0

200

400

600

800

1000

1200

1400

Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011

Cincinnati

Cleveland

Columbus

Bank-Owned Properties in Cincinnati, Cleveland, and Columbus20091st Qrt 2011

Study Area 2009 Q1 Q2 Q3 Q4 2010 Q1 Q2 Q3 Q4 2011 Q1 Total REOPct of Total

Housing Units(1-9 Units)

Cincinnati 562 589 584 514 571 163 820 856 495 5,154 2.1%Cleveland 1254 955 876 812 1042 821 909 1032 458 8,159 3.8%Columbus 998 484 517 1074 1067 859 755 754 396 6,904 2.4%

Totals 2,814 2,028 1,977 2,400 2,680 1,843 2,484 2,642 1,349 20,217 2.8%RealtyTrack, 2011


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The Foreclosure Crisis in Ohios Urban Communi es of Color

The foreclosure crisis has a widespread impact across the cities of Cincinnati, Cleveland, and Columbus with nearly everycensus tract in the study area recording elevated levels foreclosure activity since 2009. However, the analysis shows that theimpact of the foreclosure crisis has occurred disproportionately in communities of color, de ined here as neighborhoods withrelatively high concentration of African-Americans and Latinos. 16 The analysis shows that in general foreclosures and bank-owned properties increase along with the number of Black (or Latino) residents. Communities with a relatively low concen-

tration of Black and Hispanic residents (less than 16% of neighborhood population) averaged a foreclosure iling on 2.23% of the occupied housing units in the area. In contrast home foreclosure ilings in Cincinnati, Cleveland, and Columbuss commu-nities of color during the 27 study period occurred at a rate of 5.4% of occupied housing units, a rate 2.4 times more concen-trated than in predominately white areas.

Similar trends are observed when analyzing the foreclosure starts initiated by the six leading foreclosing banks. Since 2009,

the big banks new foreclosures hit approximately 3% of all housing units within the study area neighborhoods with a Highor Medium High concentration of Black or Latino residents. Big Bank foreclosure starts have occurred in these communi-ties of color at more than double the concentration (2.25 to 2.42) compared to predominately white areas of Cincinnati,Cleveland, and Columbus.

All Foreclosure Filings per Occupied Housing UnitsBy Census Tract Race

Foreclosure Filings per Occupied Housing Units By Census Tract RaceCincinnati, Cleveland, and Columbus

Bank of America, Wells Fargo, Citibank, JP Morgan Chase, US Bank, and Deutsche Bank

Source: RealtyTrac, US Census 2010

17) See Appendix IV. for details on Census Tract groups by population race


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In Cincinnati, Cleveland, and Columbus the number of completed residential foreclosures and resulting bank-owned propertyis even also highly concentrated in communities of color. Areas with a relatively low Black or Hispanic population averaged abank-owned REO property on an estimated 1.27% of the occupied housing units since the start of 2009. However, in com-munities of color the number of bank-owned foreclosed homes are three times or more concentrated that other areas of thecity. For areas with a High concentration of Black or Latino Population, over 4.3% per area occupied housing units werelost to foreclosure since 2009, a rate equivalent to about one in every twenty ive properties in these areas.

The foreclosed bank-owned property of the nations very largest banks were also the most highly concentrated incommunities of color. Compared to areas with relatively few Black or Latino residents, the major banks repossessed fore-

closed homes at triple the volume in communities of color.

Bank Owned Foreclosures per Occupied Housing UnitsBy Census Tract Race

Cincinnati, Cleveland, and Columbus

Big Bank Owned Foreclosures per Occupied Housing UnitsBy Census Tract Race

Cincinnati, Cleveland, and ColumbusBank of America, Wells Fargo, Citibank, JP Morgan Chase, US Bank, and Deutsche Bank

Source: RealtyTrac, US Census 2010


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Foreclosures and Neighborhood Housing Vacancy

Of particular interest to Ohios urban communities is how the home foreclosure crisis contributes to the problem of housingvacancy, abandonment, and neighborhood decline. The analysis of the foreclosure data set shows that in Cincinnati, Cleve-land, and Columbus bank-owned properties are on average more concentrated in areas reporting high vacancy rates. REOproperty occurred at a rate of less than 2% of occupied housing units, or approximately one out of 50 occupied residentialproperties, in areas with relatively low housing vacancy rates (less than 8.7% vacant). In areas with vacancy rates over

22.9% vacant (Medium High to High categories), REO properties occurred at a rate equivalent to 5% of all occupied hous-ing units, or approximately one out of 20 occupied residential properties. Interestingly, this analysis shows that the areaswith the highest concentration of homes lost to foreclosure are on average not the areas with the very highest vacancy rates,rather it is those with the Medium High vacancy rates (22.9%-33.5% vacant).

The above indings are also evident in examining the REO property of the major banks by census tract vacancy. Foreclosedhomes lost to one of the big banks are also concentrated in areas with relatively high vacancy rates, however they are most frequently located in areas with Medium High vacancy rates. This inding suggests that the fallout from the foreclosurecrisis may be felt most acutely in moderate income neighborhoods that previously struggled with some vacancy problemsbut which are now elevated after more than 27 months of record high levels of foreclosures and REO property.

Bank-Owned Foreclosures per Occupied Housing UnitsBy Census Tract Residential Vacancy Rate


Big Bank-Owned Foreclosures per Occupied Housing UnitsBy Census Tract Residential Vacancy Rate



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Policy Recommenda ons

Neither the economy nor the job market in Ohio can fully recover until the foreclosure crisis is solved. Big banksreckless lending and rampant speculation led directly to the near collapse of our economy, costing us eight millionjobs and ive million homes nationwide. It is time that the banks began taking the steps necessary to solve theforeclosure crisis. Below are steps the big banks should take to begin to get Ohio and the country back on track.

1) Stabilize the housing market by addressing the foreclosure crisis.

Banks must stop all foreclosures until homeowners and renters have had a real chance to save their homes. As airst step bank servicers must stop trying to subvert the Attorneys General investigation and agree to a settlement

that will truly reform the servicing industry and agree to the following;

Engage in real, meaningful loan modi ication work with borrowers before any foreclosure proceedings can beinitiated. Banks must prove they have done the work and used all tools available to keep families in theirhomes. The modi ication must be sustainable and include measures including principal reduction, perma-nently lowering the interest rate, taking into account household debts and medical expenses, and making res-olutions for the life of loan.

Mandate principal reduction for owner-occupied homes as a irst line loan modi ication tool. Writing downthe mortgage to current market or near market value for owner occupants in danger of or in foreclosure willimmediately begin to stabilize the housing market and the economy while bringing more stability to commu-nities and families.

Provide real remedies for homeowners who have already lost their homes through fraud or negligence in-cluding reinstating ownership of their house and inancial restitution.

Extend 12-months or more of forbearance for unemployed/underemployed people. Unemployment or loss of income is now a primary cause of foreclosure. Current HAMP guidelines only give unemployed homeownersthree months forbearance, despite the average length of unemployment standing at close to nine months. For-

bearance would reduce a homeowners payment to 31 percent of income and defer the remainder to the endof the mortgage.

Banks must also protect communities by keeping foreclosed homes in good condition and giving local govern-ments and nonpro its a right to buy all foreclosed homes at steep discounts.

In addition to the above measures to address the foreclosure crisis, National Peoples Action calls on the nationslargest banks to:

Pay their Fair Share of Taxes

To help the economy recovery, banks must pay the federally required tax rate instead of the approximate 11%percent of their pre-tax earnings they paid in 2009 and 2010. In addition, they should pay the $13 billion in back taxes that they owe the American people from those two years.

Invest in AmericaThe banks should start making loans to small businesses to create more jobs. For example, JPMorgan Chase hasreduced small business lending by 75% in the wake of taxpayer-funded bailouts designed to spur lending. Banksmust enter into Community Reinvestment agreements with local community partners to stimulate economic de-velopment and job creation in hard-hit communities in Ohio and across the country. They must also offer all cus-tomers sustainable mortgages and restore small business lending to pre-crisis levels.


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About the Data Set:

This foreclosure data set is utilized to provide a consistent count of homes foreclosure starts and completions in cities of Cincinnati, Cleveland, and Columbus in the during the most recent years of the foreclosure crisis. This report analyzes the

incidence of urban residential mortgage foreclosure in the study area during a 27-month period from Jan. 2009 throughMarch 2011, utilizing public records compiled by RealtyTrac, Inc. a leading real estate data provider. RealtyTrac collects andaggregates foreclosure data from more than 2,200 counties nationwide, covering an estimated 90 percent of U.S. households.Foreclosure data from RealtyTrac is utilized by various real estate and news reporting companies, including: Yahoo! RealEstate, Trulia, and The Wall Street Journal .

The foreclosure data reports two steps in the foreclosure process: the start of the foreclosure process, legally documented bythe iling of a Lis Pendens notice, and the completion of a foreclosure when a home is sold during auction and is repossessedby the mortgage holder investor, which is typically a bank or a bank-owned company in partnership with mortgageinvestors . For reference this report uses the term foreclosure iling to represent a Lis Pendens ilings and the termREO (signifying Real Estate Owned) properties for completed foreclosures. The completed foreclosures are of particularinterest because its is transfer of property ownership from the homeowner to the mortgage holder/bank and typically a

signi ies a foreclosure-related vacancy. Typically the average REO property remains vacant for two years and many of thenegative impacts associated with foreclosure are associated with vacant status of the REO property. Only geocodedproperties are included in this analysis. The data is analyzed to capture only one iling per recorded address and zip code inorder to determine the number of individual properties in foreclosure and to account for multiple ilings on the sameproperty which can distort some foreclosure reporting.

The Study Area

The reports study area consists of 766 Census tracts in Cuyahoga, Hamilton and Franklin county that reported at least oneforeclosure in the RealtyTrac data set. The study area includes almost all census tracts in the city proper of Cincinnati,Cleveland, and Columbus, as well as some census tracts in adjacent suburban cities and villages. Over 80% of all theRealtyTract foreclosure ilings occurred in one of the three main cities with the remaining ilings reported in nearbysuburban communities. Therefore, while the study area can be considered the cities of Cincinnati, Cleveland, and Columbus,in effect it includes some nearby suburban municipalities that are geographically close to and form part of a larger urbanarea with the three primary cities. See the list in Appendix 1-B for all city names covered in the study area.

It should be noted that the data set does not capture all foreclosure activity in suburban areas outside of the three cityboundaries, nor does it report foreclosures within the city boundaries prior to 2009. While the foreclosure data and analysispresented here should be considered an accurate picture of residential foreclosures in Cincinnati, Cleveland, and Columbus inrecent years, this data set is ultimately limited in its geographic coverage and timeframe and represents only an estimated40-50% of total foreclosure activity during the last four years of the foreclosure crisis.

APPENDIX I: Foreclosure Data for Cincinnati, Cleveland, and Columbus


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APPENDIX I-B: List of Reporting Cities in the Study Area by Foreclosure Filings

Reported City Name Study Area Name

TotalForeclosure

Filings Pct of TotalCleveland Cleveland 20009 31.7%Columbus Columbus 18430 29.2%Cincinnati Cincinnati 12521 19.8%Parma Cleveland 1852 2.9%Cleveland Heights Cleveland 1279 2.0%South Euclid Cleveland 1103 1.7%Garfield Heights Cleveland 1003 1.6%East Cleveland Cleveland 671 1.1%Cleveland Hts Cleveland 670 1.1%Garfield Hts Cleveland 629 1.0%Shaker Heights Cleveland 520 0.8%Parma Heights Cleveland 459 0.7%Euclid Cleveland 390 0.6%Lyndhurst Cleveland 336 0.5%

University Heights Cleveland 266 0.4%Fairview Park Cleveland 265 0.4%Warrensville Heights Cleveland 249 0.4%Worthington Columbus 232 0.4%Middleburg Heights Cleveland 214 0.3%Brooklyn Cleveland 212 0.3%Richmond Heights Cleveland 171 0.3%Gahanna Columbus 155 0.2%Obetz Columbus 153 0.2%Mayfield Heights Cleveland 148 0.2%Richmond Hts Cleveland 136 0.2%Mayfield Hts Cleveland 120 0.2%Whitehall Columbus 118 0.2%Newburgh Heights Cleveland 83 0.1%

Pepper Pike Cleveland 83 0.1%Norwood Cincinnati 75 0.1%Highland Heights Cleveland 56 0.1%E Cleveland Cleveland 40 0.1%Bratenahl Cleveland 36 0.1%Highland Hts Cleveland 36 0.1%Upper Arlington Columbus 35 0.1%University Hts Cleveland 32 0.1%

RealtyTrac, 2009-11


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APPENDIX: II-A. City Foreclosure Map of Cleveland, OH



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APPENDIX II-B: City Foreclosure Map of Columbus, OH



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APPENDIX I-C: City Foreclosure Map of Cincinnati, OH



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PROPERTY TYPE (Consolidated) Number of Proper es Total FilingsLis PendensFilings REO

Es matedHousingUnits

Single Family Residence 33570 73.5% 44845 25554 19291 1.1Condo 1230 2.7% 1433 774 659 12-4 Unit Home 4386 9.6% 6386 2935 3451 2.5

Mul -unit Apartment Building(5+) 358 0.8% 435 208 227 6

Vacant Residen al 319 0.7% 344 40 304 0

Uniden ed Residen al 5780 13% 9180 3476 5704 1.25

APPENDIX III: Foreclosed Property Type and Housing Unit Estimates for Cincinnati, Cleveland,

and Columbus

The properties in foreclosure data set were reported with the below property types. Because reported property type names are notalways consistent, some reported property types were consolidated into a common categories. Single family properties were the mostcommon. Because the number of housing units are not reported in the foreclosure data, the number of housing units are estimatedper property type with 2-4 unit properties assigned an average of 2.5 units. Then the unidentified residential properties were assignedthe average of the reported property sample, or 1.25 units. Each reported foreclosure activity was then project to impact the estimat-ed number of housing units listed. So called Single Family Residences were estimated to have 1.1 housing units on average toaccount for the misclassification of housing units that is commonplace on foreclosure records. For example, a sample of 50 labeledSingle Family Residences checked in Google maps and with county property records yielded six properties with more than oneapparent housing unit.


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APPENDIX IV: Study Area Census Tract Race and Vacancy Quintiles

Using 2010 census data, the census tracts across the three city study area with at least one reported foreclosure filing were rankedinto quintiles or five equally-populated groups according to the percentage of the tract race that is African-American or Latino and bythe percentage of vacant housing units. The five group ranking ranging from Low to High were determined by the following

population and vacancy rates:

Quintile Ranking by Race Pct of Census Tract Population African-American or LatinoLOW = 16.29% and = 36.86% and =60.10% and =82.48% and


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CityArea (Sq

Mi)Housing

UnitsHousing

Unitsper Sq Mi

Estimated HousingUnits with in 500 FtRadius (0.28 Sq Mi)

Estimated Number of Properties (1.3 Housing

Units = 1 Property)Avg HomeSales Price

Decrease inHome Value

per Property (-0.74%)

Number of Properties inForeclosure(RealtyTrac)

Loss in SurroundingProperties Values

Columbus 210.3 370,965 1,764 49 33 151,800$ 1,129$ 15,491 576,617,320$

Cleveland 77.6 207,536 2,674 75 50 85,100$ 633$ 19,860 628,323,523$

Cincinnati 78 161,095 2,065 58 39 158,000$ 1,176$ 9,654 437,919,853$TOTAL IMPACT: 1,642,860,696

APPENDIX IV: The Cost Estimates of Foreclosed Properties

A) Loss of Neighboring Property Values: $1.6 Billion

This analysis relies on research methodology from two primary sources:

Immergluck, Dan and Geoff Smith. The External Costs of Foreclosure: the Impact of Single-FamilyMortgageForeclosures on Property Values. Housing Policy Debate, 17(2006)

The Center of Responsible Lendings Soaring Spillover: Accelerating Foreclosures to Cost Neighbors May 2009.

Using the estimates from Immergluck and Smith that a foreclosures home price impact is signi icant with 500 feet radius, weestimate between 33 and 50 properties to lie within this radius given the average housing units per square mile in the threecities. Also, we use the Soaring Spillover reports estimate of a 0.744% price impact. Applied to the observed number of foreclosures in the dataset we estimate the loss to surrounding property values at $1.64 Billion per observed foreclosureevent.

B) Direct costs to Local Government are estimated at $5.5 Million since 2009 which is based on the US GAO report on Mort-gage Foreclosures dated Nov 2010. This report found 1,376 vacant and abandoned properties resulting from recent foreclo-

sures in the OH three cities. Given that foreclosure completion rate during 2009-2011 were higher that the preceding years2007-2009 by 50%, we conservatively estimate another 2,000 vacant properties resulting from recent foreclosure totals.Projecting the impact of 3,376 total vacant and abandoned properties we rely on the $60 Million and Counting Report pre-pared by study performed by Community Research Partners and ReBuild Ohio which observed actual city expenses in Cleve-land and Columbus related to vacant property. These cost are listed below and average $409 per vacant property whichwhen applied to the 3376 estimate vacant foreclosed properties produced $1.38 Million in city costs for maintenance, Policeand ire, and demolition

DemoltionNumber of Vacant Properties and

LotsCleveland 1,234,666$ 12381 99.72$Columbus 196,699$ 4868 40.41$

17,249 70$

Grass and Trash

Number of Vacant Pr operties and

Lots

Cost per Vacant

PropertyCleveland 3,275,000$ 12381 264.52$Columbus 515,182$ 4868 105.83$

Average Price per Vacant Home: 185$

Police and FireNumber of Vacant Pr operties and

LotsCost per Vacant

PropertyCleveland Neighborhoods 305,000$ 1922 158.69$Columbus Neighborhoods 185,000$ 1247 148.36$

Average Price per Vacant Home:154$

Total City Costs Per VacantProperty:

409$

Estimated Long Term Vacant3 376

Source: Community Research Partnersand ReBuild Ohio

Documents

Foreclosing on Ohio - Big Bank Foreclosures in Cincinnati, Cleveland, And Columbus